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December 22, 2017


We have been so hyped up with the recent Digital Free Trade Zone (DFTZ) launched by Jack Ma and our Prime Minister Datuk Seri Najib Razak but do you really know what a free trade zone is? We will be sharing with you all about free zone, its benefits and the documents that are required if you happen to be involved with free zones in Malaysia.

Free Zone started with three major policies in Malaysia:

  • The Free Trade Zone Act 1971
  • The Free Zones Act 1990
  • Free Zones Regulations 1991

All the acts were implemented to provide for the establishment of Free Zone in Malaysia to promote economic development.

Free Commercial Zone (FCZ) is a designated area for only commercial activities such as breaking bulk, grading repacking and relabelling to take place (except retail trades).

Free Industrial Zone (FIZ) is meant for manufacturing activities only.

Documentation – Movement of Goods to and from Free Zone
Regulation Types of Movement Prescribed Form
Reg. 21 Goods entering free zones from outside Malaysia FZ1 (import)
Reg. 22 Goods entering free zone to places outside Malaysia FZ1 (Export)
Reg. 23 Goods on transshipment at free zones FZ1 (Transshipment)
Reg 24 (1)(a)(aa) Goods entering principal customs area (PCA) from free zone (FZ) K1
Reg. 24 (1)(b)(bb) Goods entering FZ from PCA

Goods to bonded warehouse (BW) or another FZ from FZ

K2

K8

Reg. 27 Goods entering FZ from BW or another FZ K8
Reg. 25 (1)(b)(bb) Export of goods from PCA through FZ without intending to deport such goods at FZ K2
Reg. 26(1) Removal of duty-paid goods from FZ to PCA K3
Reg. 28 Removal of goods from FZ to LMW, ICD

Export of goods from LMW to FZ

Goods originating from abroad taken to FZ through PCA

K1

K2

K8

Reg. 29 Removal of dutiable or taxable goods within Malaysia through FZ K8
Benefits of Using Free Commercial Zone
  • Lowers your cost (beneficial for cash flow)
  • Less restrictions on transshipments and re-export trading
  • Simple documentation and procedures using online transactions
  • Storage and consolidation
  • Value added services
  • Staggered importation to PCA (deferment of duty)

If your company does import and export, it is really wise to consider using the Free Zone for your trades. You save a lot on procedural documents and the costs involved.

Unsure of how to begin? Perhaps drop us an email (enquiries@multi-trans.com.my) or give us a call (+603 3375 2288) and we shall assist you with all necessary documents and processes.

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